And Chambers hasn't lost a single ounce of confidence in his strategy. "In every major market transition, we have historically emerged even stronger, with more market share and intense targeted focus," he said on the first-quarter earnings call. "In our opinion, we are well on our way to doing this once again." This is, according to Chambers, a "reinvigorated Cisco, the aggressive, the focused, the simplified Cisco you have come to expect over the years."

Sales increased by 4.7% year-over-year and non-GAAP earnings nudged up by a penny to $0.43 per share. Analysts had expected a smaller sales gain and shrinking earnings, so that's a positive surprise. I've seen at least four analyst upgrades or raised target prices after the report and shares jumped as much as 7.8%.

Three strikes -- you're out!This sudden outpouring of love and enthusiasm ignores a few important downsides to the Cisco story, though.

Chambers wants to focus on higher gross margins, but that story isn't playing out quite yet. Trailing gross margin actually shrunk for the fourth quarter in a row and that weakness largely keeps cascading down to operating and net margins as well. Strike one.

Revenue did grow a little, but 4.7% is a very meek growth rate for a company used to seeing double-digit numbers on that metric. This is a picture of decelerating growth, which doesn't look good at all next to shrinking margins. Strike two.

Finally, Cisco produced $2.1 billion of free cash flow this quarter, then spent $2 billion on dividends and share buybacks. You might see this as an opportunistic and perhaps brilliant use of capital, but I see Cisco artificially goosing one quarter's results with an unsustainable buyback policy. It's smoke and mirrors. Strike three in my book.

I'm more comfortable reading Cisco's news as a report on the networking market's general direction than accepting it as proof of the specific company's return to health. Other Fools may disagree. Cisco is, after all, an active holding or recommendation in three different services here, with plenty of real money on the line.

But for my money, I'd rather invest in smaller and hungrier networking players with less of a CEO ego to support. I've got a real-world position in little-known network installer Sonus Networks (Nasdaq: SONS) for example, and would also take a long, hard look at chief rival Juniper, optical equipment expert JDS Uniphase (Nasdaq: JDSU) , or cable-system efficiency specialist Arris (Nasdaq: ARRS) before clicking that "buy" button on Cisco.

For more on Arris and how that rarely heard name is making a difference to high-speed networks and profit-hungry investors, take a look at this special report. Arris was tagged as our top stock for 2011, and the long-term growth story remains the same. Get your report by clicking here; it's totally free so you've got nothing to lose.

Fool contributor Anders Bylund owns shares of Sonus Networks but holds no other position in any of the companies mentioned. The Fool owns shares of and has created a bull call spread position on Cisco. Motley Fool newsletter services have recommended buying shares of Riverbed Technology and Cisco, as well as writing puts in Riverbed Technology. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Check out Anders' holdings and bio, or follow him on Twitter and Google+. We have a disclosure policy.

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You claim Cisco's buyback strategy is "unsustainable" and "artificially gooses this quarter." Cisco has bought back $70B in the past 8 years, has a committed $7B yet to go with current approved buybacks, $35B net cash on the balance sheet, and generates $9B - $10B per year in FCF. So clearly it isn't a one quarter effect nor is it unsustainable.

If you believe all the things you say about Cisco, why wouldn't you also recommend shorting CSCO? With such a solidly negative conviction I am surprised you don't short CSCO yourself unless, perhaps, you aren't as convinced as your comments indicate.

Additionally, yesterday with Cisco's newly reorganized product category revenue reporting scheme, Cisco appears to have added $693 million in annual revenue (i.e. Storage) to its switching revenue category as well as having added almost $1.2 billion in annual revenue (i.e. Optical/Other) to its router revenue category: